The turbulence began on Tuesday morning with one of President-elect Donald Trump’s signature tweets of wrath: A public jab at Boeing, alleging that the cost of building Air Force One had spiralled out of control. That came an hour after Boeing’s chief executive was quoted questioning Trump’s stance on trade. In the afternoon, Trump directed his attention elsewhere, taking credit in a surprise announcement for a Japanese conglomerate’s months-old pledge to invest $50 billion (Dh183.9 billion) in the United States.
In the raucous hours in between, a top Trump aide announced offhandedly that, months before, Trump had sold his entire stock portfolio, which some ethics advisers had worried could raise questions about conflicts of interest during his presidency.
It was a day of big pronouncements and few details, leaving many wondering whether this would be the unusual and unpredictable way that Trump will govern when he takes office next month.
That style, including his opaque personal financial dealings and his sudden shots at certain companies, has helped unnerve a corporate America that traditionally craves stability. Some business leaders and economists have worried whether executives can speak their minds about the president-elect or his policies without fear of facing Trump’s rage.
“Twisting people’s arms is inherently problematic” for a president, said N. Gregory Mankiw, a professor of economics at Harvard who served as chairman of the Council of Economic Advisers under former US president George W. Bush.
“The president has so much power, you always wonder if there’s some implicit threat to individuals and that goes beyond what I think a limited government should do,” Mankiw said.
But some defended Trump’s highly visible way of doing business in his transition to the Oval Office. Lanhee Chen, policy director of Mitt Romney’s presidential campaign, who is now at Stanford University’s Hoover Institution, said he was not terribly concerned by Trump’s interactions with individual corporations and chief executives.
“I just assume this is what generally happens,” Chen said. “I don’t think it is that unusual for a president to make appeals to specific companies. What may be unusual is the public nature of the communications. But the activity itself is not uncommon” for presidents or for governors, he said.
Trump has for months targeted companies that, like his own, have shipped jobs overseas. In a string of early-morning tweets last Sunday, he threatened “retribution or consequence” for companies that move operations out of the country, as well as a 35 per cent tariff on goods sold back to the US. Trump’s Boeing slam on Tuesday, though, was something new. The president-elect criticised the Chicago-based jet manufacturer, alleging that the costs of its federal contract to build a new Air Force One had, as Trump said, spiralled “out of control”.
Trump’s tweets came roughly an hour after the publication of a Chicago Tribune column, citing Boeing chief executive Dennis Muilenburg’s suggestion that Trump and Congress “back off from the 2016 anti-trade rhetoric”. Trump spokesmen did not explain why he had targeted Boeing and did not provide other details. But they contributed to the confusion, by claiming on Tuesday morning that Trump had in June sold a stock portfolio that by last year was worth up to $40 million.
The sale of Trump’s shares in big banks, oil conglomerates and other companies with business before the government would have netted Trump millions of dollars during his costly presidential campaign. It also could help him tamp down worries over conflicts of interest between his private holdings and public job.
But beyond spokesman Jason Miller’s comments on Tuesday to the Washington Post, Trump representatives have not provided records of stock transactions or other details since a financial-disclosure filing released in May. Over the past five months, Trump campaign officials gave no indication of the stock sale. Trump has also refused to release his tax returns, which would provide more detailed information about his financial holdings.
As president, Trump will be subject to the Stock Act, a 2012 law that requires elected officials, including the president, to publicly disclose any stock transactions worth at least $1,000 within 45 days. By Tuesday afternoon, Trump had taken a new turn, announcing that a Japanese telecommunications firm, SoftBank, had agreed to invest $50 billion in US start-ups, a move he tweeted that the company would never have done “had we (Trump) not won the election!” The president-elect made a brief showing in the gilded lobby of Trump Tower to announce the investment, smiling for the cameras and shaking hands with the firm’s chief executive, Masayoshi Son. The deal, however, is not new. The money will come from a $100 billion joint investment fund that Son established in October using money from partners.
SoftBank has invested in the US in the past, including paying $22 billion in 2013 for an 80 per cent share of Sprint. The firm also led a $1 billion investment round last year in San Francisco-based online lender Social Finance.
Trump’s announcements followed his assertion last week that he had saved 1,100 jobs in Indiana through a deal with air-conditioning company Carrier. The agreement, which includes $7 million in state incentives for the company, will actually keep 800 workers in the state, while 600 jobs will still go to Mexico.
In an interview on Monday with CNBC’s Jim Cramer, the chief executive of Carrier’s parent company confirmed that it had made the deal in part out of fear. “There was a cost as we thought about keeping the Indiana plant open,” United Technologies chief executive Greg Hayes said. “At the same time ... I was born at night, but not last night. I also know that about 10 per cent of our revenue comes from the US government.”
After Trump concluded his public events at Carrier on Thursday night, he took on a second company that has announced it is moving jobs from Indiana to Mexico. “Rexnord of Indiana is moving to Mexico and rather viciously firing all of its 300 workers. This is happening all over our country. No more!” he tweeted last Friday. Rexnord, which is based in Milwaukee, announced in June that it was closing an Indiana plant, resulting in the loss of 300 jobs.
Keith Hennessey, director of the National Economic Council under Bush, warned about the impact of Trump’s approach to business and trade, which he said could do “long-run economic harm to the US”. “When a politician rewards his business friends and punishes his business enemies it’s called crony capitalism,” Hennessey wrote in a blog on his personal website on Monday. “It creates incentives for other business leaders to spend their time and money trying to get similar political access with elected officials,” Hennessey added. “And a firm leader now knows it can initiate a negotiation with the Trump administration simply by threatening to outsource jobs.”
In his blog, Hennessey urged Trump to stop “trying to tell individual American business leaders how to run their companies”. He said his criticism was aimed at Trump’s manoeuvres around Carrier, Rexnord and tariffs, but said he did not want to comment on Boeing.
Mankiw, the former Bush economic adviser, said targeting individual companies runs contrary to “equal protection of the law, which is a fundamental principle of fairness”, violating founder John Adams’s contention that the US should be a nation of laws and not men. Beyond using the power of the presidency to intimidate in unpredictable and unfair ways, no individual could efficiently manage the economy, company by company, said Mankiw, who had indicated before the election that he did not plan to vote for Trump. “When a chief exec is making individual calls to individual companies, he’s in some sense acting like a central planner,” Mankiw said. “We have a lot of history under Communism that suggests it doesn’t work well in practice and that’s the direction you’re heading to as the president starts to weigh in on individual business decisions.”
— Washington Post
Drew Harwell is a national business reporter at the Washington Post. Rosalind Helderman is a political enterprise and investigations reporter for the Washington Post.
